April 3, 2017 / 10:56 PM / 8 months ago

Second Australia miner declares force majeure in wake of Cyclone Debbie

SYDNEY (Reuters) - Australia’s QCoal on Tuesday became the second miner to declare force majeure in the wake of Cyclone Debbie, as the deadly storm’s damage to railway lines in the country’s northeast disrupts exports and pushes coal prices higher.

The cyclone, which struck last week as a category four storm, one rung below the most damaging category five, has now left a disaster zone stretching 1,000 km (600 miles) and subsequent flooding has claimed at least four lives.

The disruption, which primarily affects steel-making material coking coal, comes after damage to Aurizon Holdings’ rail lines that has reverberated around the market leading to price rises in both coking and thermal coal.

Some of Aurizon’s rail network will take up to five weeks to repair, the company said, disrupting coal deliveries from mines to ports.

Privately-owned QCoal said in an emailed statement on Tuesday that it had declared force majeure on two coal shipments “due to infrastructure availability”. It did not give the volume of the cargoes.

Yancoal Australia Ltd has already declared force majeure, while miners including BHP Billiton and Glencore PLC are waiting to see if they will be able to fulfil contracts with customers in Japan, China, South Korea and India.

Queensland accounts for more than 50 percent of global seaborne coking coal supplies, with the Goonyella rail line alone transporting more than half of the state’s coal.

The Insurance Council of Australia has declared the cyclone a catastrophe, which could cost hundreds of millions of dollars in losses and state officials have warned recovery and repairs will take months as many areas remain subject to evacuation orders.

Floodwaters receded from many parts of New South Wales state on Monday, though last week’s deluge is still flowing through river systems further north. New Zealand is bracing for heavy rain on Tuesday as the storm crosses the Tasman Sea.

BHP Billiton, the world’s biggest exporter of metallurgical coal, said on Monday that crews were returning to work at its coal mines in the storm-hit region.

(Click here for a graphic on 'Cyclone disrupts coal market' here)

Reporting by Tom Westbrook; Editing by Chris Reese and Joseph Radford

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